1-the basic economic problem
opportunity cost
next best alternative given up when we make a choice. in other words , real cost of chossing a thing and not the other.
entrepneur
one who combines land, labour and the capital. profit
labour
physical or metal effort used by human. wages
captial goods
products demanded by theproducerfor producing other goods. Cannot satify human needs and wants directly. ex-machinary, tools etc
public goods
provided by government in a society to everyone, who can afford to pay for the same. They are non exudability, and non rivarly. transport etc
consumption
the utilization of economic goods to satisfy needs or in manufacturing
consumer goods
directly demanded by the consumer and can satify needs and wants directly.
captial
factor to produce goods. interest
free goods
gift of nature-avaiable on earth. hence no opportunity cost is given up.
merit goods
goods or services that the government feel the people, left to themselves, will UNDERCONSUME and which therefore ought to be subsidized or provided free to users; can be provided both publicly or privately but is usually provided publicly-->generate positive externalities
economic goods
A good or service that is relatively scarce and so has a price. An opportunity cost is involved when it is consumed. pen, car, etc.
scarcity
A situation in which unlimited wants exceed the limited resources available to fulfill those wants
resources
anything which helps to satisfy our needs and wants. For example food, fossil fuels etc
land
gift of nature. factor cost: rent forest etc
charactericta of an entrepnuer
risk taking creative motivating -welll communicating planning adaptability in market situation coordinating
non durable goods
satify wants directly, but can be used only one time.
durable goods
satisfy wnats directly, but can be used mulitple times.
the basic economic problem
scarcity. It arises because human are unlimited and the resources are limited. hence, it is not possible to satisfy everything for everyone.
Production possibilty curve
shows max. combition of goods and services that can be produced by an economy in agiven period of time with its limited resources.
wants
the goods and services which are essential for survival, but add luxury to our lives. car, AC, perfume etc.
Needs
the goods of services which are essential for survival. water, food etc.
economic
Economics is about economizing. i.e. Making the most of what we have.
factors of production
Land, labor, and capital; the three groups of resources that are used to make all goods and services
